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With the prices of ingredients and the quantity of dishes you make fluctuating during winter, reducing your food costs is an opportunity to tackle your pantry constraints and increase your profits. 

Labour costs
 
  • Labour costs comprise of salary, allowances and fringe benefits for employees.
  • Fringe benefits include health insurance, petrol, travel and cellphone allowance, personal use of company-owned vehicles and other similar benefits.
Overhead costs
 
  • Overhead costs, on the other hand, refer to costs that are not classified under labour and food cost.
  • This includes rent, utilities, taxes, marketing and advertising, office supplies, equipment, training, etc.
Food cost is the cost of all edible ingredients
 
  • Food cost is the cost of all edible ingredients served or sold to customers.
  • This comprises the costs for fruit, vegetables, meat and all ingredients used in food preparation.
  • Food cost is also known as your direct cost and refers to the cost of an actual product being sold.
  • Because the quantity of dishes which are sold may vary and the cost of buying ingredients may fluctuate in comparison to a forecast, your direct cost will also change from time to time.
make the most out of food cost
 
  • Because food tends to lose weight as it goes through the cooking process and also because food perishes with time, we have to make the most out of food cost. It is also important to consider the portion of food that will be discarded through preparation, peeling or de-boning.
Minimising food costs
Food is highly perishable


1. Food is highly perishable

Imagine ordering enough fresh seafood to prepare 100 servings but only having 50 diners in the following two days. The other 50 portions will be wasted. It’s therefore important to be conscious of the quantity of food you purchase and produce to avoid unnecessary food costs.

Food is seasonal


2. Food is seasonal

The price and quality of ingredients will vary throughout the year. Purchase ingredients that are in season to take advantage of fresh produce and better prices because of the increased supply.

Food is subject to theft


3. Food is subject to theft

Theft occasionally happens in some kitchens and therefore adds to food cost. Control this by monitoring your staff and consider your current employee benefits to discourage stealing.

Food changes form through preparation


4. Food changes form during preparation

Just as dry pasta absorbs water and increases weight when it’s boiled, all ingredients change form during processing and cooking. By monitoring these changes and finding the best way of handling and processing the food, you can maximise yield.

Food may be purchased in different forms


5. Food may be purchased in different forms

A Chef often has many options as to what form of food to buy. These decisions have to be made carefully to make the smartest choice. An example would be buying a whole fish in comparison to just a fillet. While the latter would cost more because it has been prepared, less time would have to be spent preparing the dish for use in the kitchen. A whole fish would however be cheaper.